Payment Bond

Payment bonds are used to join three parties. The oblige, also known as the project owner, this is the person who may want, or in the case of a commercial project or publicly funded project, be required have a payment bond in use during a project. Secondly would be the principal, this would be the contractor who actually purchases the payment bond. Depending on the projects the contractor bids on, this may be a requirement of the bid to ensure that both the material supplier and sub-contractors are paid. The third party involved in a payment bond would be the surety. This would be the company that issues the bond, thus ensuring that everyone involved in the project under the contractor is paid, should the contractor fail to follow through on his job.

Payment bonds are required on federal or government projects over $100,000 per the Federal Miller Act, however cannot be used on projects below this amount. Privately managed projects may also opt to use payment bonds as well, though not required, to ensure that subcontractors are paid, as are materials used in the construction of their projects are paid for. A payment bond is quite similar to a mechanics lien in that if a contractor does not pay his subcontractors of pay for his materials in a timely fashion, rather than the project owner worrying about the workers having cause to quit, a third party, the surety, will step in and guarantee payment.

Due to the nature of payment bonds, they can be hard for some contractors who have bad credit or other financial issues to obtain.

 


Application for


Current or expiring quote we are looking to beat:


Name of previous surety company writing to the bond:


Section I: Bond Applied for

Type of Bond

Effective Date

Expiration Date


Type of Company

CORP

LLC

DBA

Partnership

Bond Amount


(Obligee)


Obligee Address


Section II: General Information

Applicant's Name

Spouse Name


SS#

Spouse SS#

Home Phone


Residence Address

City

State

Zip


Status of Residency

Own

Rent

At Current Address Since


Date of Birth

Spouse Date of Birth

Business License Number


Business Name


Business Phone

Business Fax

Business Email


Business Address

City

State

Zip


Date Business BEGAN Under Present Individual or Firm Name

Business Tax ID


Has any company refused to issue bonds for any purpose?

Yes

No

Do you have any liens, claims or judgements against you?

Yes

No


Has applicant ever failed in business?

Yes

No

Has applicant filed bankruptcy in the last 10 years?

Yes

No


If yes, Chapter 7?

Yes

No

Chapter 11?

Yes

No

Chapter 13?

Yes

No


Date Filed for Bankruptcy?


Date of Discharge?


If yes to any, please explain:


Section III: Additional Parties

Name

Spouse Name


SS#

Spouse SS#

Home Phone


Home Address

City

State

Zip


Personal Financials

(if more than one owner, each has to fill out this app)

Statement of assets and liabilities as of


Assets Liabilities
Cash in Bank Notes Payable to Banks
Cash on Hand Notes to Others(excl. of equipment)
Stocks and Bonds Accounts Payable
Accounts Receivable Federal and State Income Tax Due
Notes Receivable All Other Taxes
Inventory Accruals, Payrolls, Etc.
Cash Value Life Insurance    
Equipment Due on Equipment
Real Estate Due on Real Estate
Other Assets Other Liabilities
    Surplus and Undivided Profits
    Capital Stock(if a corporation)
       
Total Assets Total Liabilities

Net Worth


Name of Owners

Name and Title of Officers

% of Ownership


Are you an insurance agent?

Yes

No

Agent License #

Agent State

Completion of this form constitutes permission for Cal Society Insurance Services to obtain customer information which will be used to determine bonding eligibility. This information will be held in the strictest confidence.